Sanders’ Plan to Reform the Fed Exposes a Democratic Rift on Wall Street
These are the ideas that deserve our attention. These are the observations we should have at hand. This is how we can unencumber our economy of its lobbyist shaped stagnation.
If I were elected president, the foxes would no longer guard the henhouse. Sen. Bernie Sanders (I-Vt.)
Perhaps his most sweeping change would be requiring the heads of the 12 regional Federal Reserve banks to be appointed by the president, which would require Senate confirmation. He would also ban sitting financial executives from being board members of the regional Fed banks.
Five of the seats on the interest rate-setting Federal Open Market Committee are reserved for regional Fed presidents, ensuring them a prominent voice in monetary policy. The committee officially consists of 12 seats, including seven presidentially appointed Fed governors. But due to the Senate’s unwillingness to confirm Obama governor nominees, it has lately consisted of just 10 members, giving the regional heads greater sway than they had in previous eras.
Sanders notes that, at present, four of the 12 regional Federal Reserve bank presidents previously worked for Goldman Sachs. That is disconcerting to Sanders and others who argue that financial industry veterans are predisposed to prioritize inflation concerns over full employment.
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